Opinion – China’s Institutional Challenge by Andrew Sheng and Xiao Geng – Project Syndicate – John Gelmini

English: The skyline of Shanghai, China.

English: The skyline of Shanghai, China. (Photo credit: Wikipedia)

Dr Alf is right, China is now moving to a 2-speed economy in order to avoid a hard landing.

The ProjeCT Syndicate article describes the strategy in action whereby traditional smokestack industries are being slowed down and investment is pouring into the new high-tech areas that the Chinese leadership has identified for growth.

The second strand is increased overseas investment into industries which the Chinese can then reshore production back to themselves or robotize.

The 3rd strand is the continuation of the “Go out/Bring back in ” policy whereby the practically minded are encouraged to migrate overseas, send money home to elderly relatives and establish new businesses which keep them and their families.

The 4th strand is to invest in infrastructure projects which are essential to transportation, energy generation, life essentials and transport in those countries.

Hinckley Point, Bradwell, the London Underground, the Nicaraguan canal, Wessex Water, Manganese Bronze and the Port of Felixstowe are all part of this process along with reducing exposure to the dollar.

Lord Rothschild, whose judgement is extremely sound, saw China’s potential years ago and from his enormous mansion in Shanghai is able to see how his investments are doing first hand.

John Gelmini

Opinion – The Osborne Doctrine | The Economist – John Gelmini

George Osborne will, barring his demise, become the next Prime Minister.

As Dr Alf has highlighted, Osborne’ss approach to China is exactly right because we need to trade with them and other regimes, and to do that we must reserve our criticisms for private discussions, so as to save their face.

In any case, before we criticise we must be sure that we are beyond reproach and too often we are people in “glass houses” throwing stones.

The benefits cap brought in by George Osborne makes good sense because it clears benefits recipients out of London and expensive cities freeing up space for inward investors, the wealthy and job creators. That in turn creates a ripple effect throughout the rest of the country.

My criticisms of George Osborne are that he needs to limit the timescale of austerity by administering the medicine much faster and that more needs to be done to help exporters and encourage inward investment, greater worker productivity and a more enlightened approach to business risk by directors spending too much time sitting on their hands.

John Gelmini